EconPapers    
Economics at your fingertips  
 

Financial Aid and College Persistence: Do Student Loans Help or Hurt?

Serge Herzog ()
Additional contact information
Serge Herzog: University of Nevada, Reno

Research in Higher Education, 2018, vol. 59, issue 3, 273-301

Abstract: Abstract Using data from two freshmen cohorts at a public research university (N = 3730), this study examines the relationship between loan aid and second-year enrollment persistence. Applying a counterfactual analytical framework that relies on propensity score (PS) weighting and matching to address selection bias associated with treatment status, the study estimates that loan aid exerts a significant negative effect on persistence for students from low-income background (i.e., Pell eligible), and those taking up high amounts of loans in order to meet total cost of attendance, including students who exhausted the available amount of subsidized loan aid. However, no significant incremental effect associated with unsubsidized loan aid, net of subsidized loan aid, could be detected. The estimated effect of loan aid on persistence controls for first-year academic experience and takes into account 26 factors related to loan selection and persistence in order to match students with loan aid to a counterfactual case in covariate adjusted regression. Comparison with results from non-matched-sample analysis suggests selection bias may mask the negative effect of loans detected with matched-sample estimation. Validity of covariates determining the loan selection process and criteria for acceptable balance in the matched data are discussed, and implications for future research are addressed.

Keywords: Student persistence; Financial aid; Loans; Low income; Causal inference estimation; Propensity score (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s11162-017-9471-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:reihed:v:59:y:2018:i:3:d:10.1007_s11162-017-9471-1

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/11162

Access Statistics for this article

Research in Higher Education is currently edited by Robert K. Toutkoushian

More articles in Research in Higher Education from Springer, Association for Institutional Research
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-11-06
Handle: RePEc:spr:reihed:v:59:y:2018:i:3:d:10.1007_s11162-017-9471-1